Good news for grocery shoppers

The Bureau of Labor Statistics this morning announced its inflation report for April, which didn't show much of a tariff effect. Economists still expect one to come, Enda Curran writes. Plus: Trump's trade war will show up on holiday shelves, and the future of the Cartoon Network is unclear.

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The economy was a top issue for Donald Trump's supporters in the 2024 election, many of whom were fed up with post-pandemic inflation. So Tuesday's report on the consumer price index (CPI) was always going to be closely watched. And that was before the trade war ratcheted up fears about the prices Americans will pay.

Yet inflation data for the month of April show little signs of the tariff effect, for now at least. Prices for new cars and clothing, among the items most exposed to the tariffs added to goods by the Trump administration, didn't spike. When volatile prices for food and energy are stripped out, the CPI rose 0.2% from March, the third-straight month of softer-than-forecast readings.

There were some other standout categories too. Grocery prices fell by the most since 2020, and egg prices dropped by the most since 1984, bolstering a narrative that inflation remains contained.

Inflation in appliance prices was up in April. Photographer: George Frey/Bloomberg

Yet even as trade hawks claim that data as a win, economists are quick to caution that the tariff effect has yet to be fully felt. A rush to stock up on inventory ahead of the new duties means many businesses are selling items that came in before the tariff announcement, easing pressure on retail outlets to lift prices.

At the same time, Trump's move to suspend his so-called reciprocal tariffs for a period of negotiation means the brunt of tariffs on major trading partners has yet to be felt. An exemption on electronics goods from China has lowered the tariff burden, and the latest agreement between the US and China to bring down tariffs while talks continue will also take pressure off.

Still, economists say it's only a matter of time before prices for imported goods start to nudge higher. Estimates by the Yale Budget Lab show consumers now face an overall average effective tariff rate of 17.8%, the highest since 1934. There were hints of what might be ahead in the April inflation data—prices for furniture and appliances, the typical kind of products that Americans buy from overseas, rose.

Whichever side of the trade policy debate is ultimately proved right, it's clear that the April inflation data is merely an early chapter in a long story.

Related: Monetary policy is too technical to be left to the politicians and too political to be left to the technocrats, Tom Orlik writes: The Problem With the Fed Isn't Independence, It's Accountability

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Have a Very Tariff Christmas

Photographer: Kyoko Hamada for Bloomberg Businessweek

Because the process of bringing goods to the US starts months in advance of their appearance on store shelves, a whole host of disruptions has already been baked into the rest of 2025, even if the average person can't see them yet. In particular, it could be slim pickings for many seasonal goods commonly imported from China—prom and wedding dresses, fireworks for the Fourth of July, new TVs for football season, laptops for kids going off to college, and toys and gadgets and beauty product gift sets for Christmas—just as Americans head to stores looking for them. An extended period of shortages and financial strain on regular people might lead us into a very tariffed holiday season.

Trump's trade war has planted a series of bombs in the consumer economy that will go off for at least the rest of the year. Even if the tariffs disappeared tomorrow—a best-case scenario—"you probably have another six months to wrestle through it before you can get somewhat back to normalcy," says Rob Holston, the global and Americas consumer products sector leader at EY. "The spike has been put into the system, and it's not like you can just pull it back." In an interview on Bloomberg Surveillance, Gene Seroka, the executive director at the Port of Los Angeles—the country's busiest container port and the one that handles the bulk of Chinese imports—estimated that most US retailers have only about a five- to seven-week stockpile of pre-tariffed goods left on hand.

Trump administration officials have said they're not worried about shortages, but the president himself has talked about giving kids fewer, or more expensive, dolls this year. Amanda Mull's reporting leads to the conclusion: Trump Has Already Ruined Christmas.

Last Laughs for the Cartoon Network?

Illustration: Niro Perrone for Bloomberg Businessweek

One night in August, a group of animators headed out on foot through the streets of Burbank, California, cloaked in Mission: Impossible-style black outfits. About 10 p.m., the crew arrived at its destination, a deserted office disconcertingly close to the neighborhood police station. For decades, the building had served as the bustling studio of Cartoon Network, which, like much of the cable universe, has fallen on challenging times. Until recently, the facility was a place where young animators daydreamed of launching their creations into the world. Now it sat empty and foreboding—another reminder of the grisly cost cuts that had been sweeping through Cartoon Network's parent company, Warner Bros.

On the sidewalk outside, the animators hurriedly set up a generator, a projector and a laptop outfitted with video-loop software, and hit play. For the next several minutes, an animated vignette played on repeat across the building's facade: A large disembodied hand clutching a pencil rubs out "Cartoon Network" from the top of the building, then tries to erase a nearby worker, who scampers for safety. After a brief pursuit, a pack of colleagues band together and collectively shove away the menacing pencil pusher. The film ends with an unsubtle message: "Dear studios: Don't erase animation jobs!"

The group circulated the video online, adding to an expanding body of work bemoaning the state of the US animation industry, where concerns about unemployment are high, new series scarce, overseas outsourcing rampant and anxiety over artificial intelligence widespread.

The Cartoon Network once cranked out hits, talent and profits, Felix Gillette writes. But with Warner Bros. Discovery CEO David Zaslav leading a retreat from streaming kids programming, its future is in question: Cartoon Network's Last Gasp.

US in a Travel Slump

$12 billion

That's how much the US is projected to lose in travel revenue this year. Among the reasons: a strong dollar and a shift in international travelers' views due to the Trump administration's "America First" rhetoric and policy.

Broken Systems

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Jeffrey Szczygielski

A recent retiree who had a 40-year career that included stints as an air-traffic controller and a supervisor as well as held policymaking roles with the Federal Aviation Administration

The flight chaos at Newark Airport is a reminder of the crisis rocking air traffic control jobs. The path to alleviating the staffing shortage runs through a training academy in Oklahoma City.